Euro RSCG

Euro RSCG was formed in Paris in 1991 when Eurocom acquired Roux Séguéla Cayzac Godard; at the time, both companies were in financial straits. The merger produced the No. 1 agency in Europe and No. 6 in the world. Euro RSCG set out to globalize its advertising business by targeting the U.S. market.

The formation of Euro RSCG brought immediate problems with its U.S. subsidiary agencies, in particular Della Femina McNamee. Eurocom's relations with the agency's chief, Jerry Della Femina, had never been good, and the agencies' relations worsened after the merger. Clients deserted as the parties fought, forcing Euro RSCG to buy out Mr. Della Femina in 1992. After that, Euro RSCG reorganized its U.S. operations into seven agencies, the two most important being Euro RSCG Tatham in Chicago and Messner Vetere Berger McNamee Schmetterer/Euro RSCG in New York.

After the merger, Euro RSCG had to fight to retain the Procter & Gamble Co. account. Before it acquired RSCG, one of Eurocom's clients had been Henkel of Germany, whose interests as a marketer of home products conflicted with those of P&G. Further problems arose for Euro RSCG when Charlotte Beers, the head of Tatham who had dealt with P&G for several years, left to join Ogilvy & Mather in 1992. Euro RSCG ultimately sacrificed its Henkel account but realized the benefits of P&G's global reach.

Euro RSCG faced potential client conflicts in Europe as well. The shop addressed that issue by reorganizing itself into five separate agencies that retained their individual names and identities while operating under the Euro RSCG banner. Scher, Lenoir & Lafarge, for example, became Euro RSCG Scher, Lenoir & Lafarge & Henocq; Benitah & Julien became Euro RSCG Henocq, Benitah & Julien. The European reorganization took two years but was accomplished with minimal layoffs and loss of clients.

Advertising giant

As a result of these various actions, Euro RSCG became an advertising giant with 2,500 employees and nearly $500 million in annual billings, making the French agency twice as large as Publicis, its European rival.

To build its presence in the U.S., Euro RSCG bought Dahlin Smith White in 1996 and, in 1999, Jordan McGrath Case & Partners. At the time of its acquisition, DSW had billings of $128 million and clients included Intel Corp. and Iomega Corp. Euro RSCG handled Intel in Asia and, by acquiring Intel's estimated $100 million U.S. account, Euro RSCG boosted its worldwide relationship with Intel to one worth $150 million annually. Iomega brought Euro RSCG $35 million in billings, further giving the agency a reputation as a leading technology shop.

In addition to financial gains, the relationship with Intel benefited Euro RSCG in other ways. Before giving the agency its account, Intel insisted that Euro RSCG improve technologically. Prior to 1996, Euro RSCG had more than 100 offices worldwide but no companywide e-mail system. Such a worldwide computer network, it was believed, would produce more effective advertising by increasing connections among executives at both companies.

The jointly created computer system gave users at Euro RSCG and Intel the ability to observe the progress of campaigns from start to finish and to send instant feedback. Euro RSCG's first big U.S. campaign for Intel launched the Pentium III chip on Super Bowl XXXIII in 1999.

In 1999, Euro RSCG moved to increase its presence in U.S. pharmaceutical and healthcare advertising by acquiring Jordan McGrath Case & Partners. The acquisition brought with it $600 million in billings from SmithKline Beecham, Novartis and Pharmacia & Upjohn. Moreover, Euro RSCG positioned itself to strengthen its ties to P&G, as Jordan McGrath handled P&G's Bounty, Zest, Safeguard and Era in the U.S.

American executives

In 1995, Euro RSCG named American Steve Dworin its vice chairman and, in 1997, named another American, Robert Schmetterer, its CEO, succeeding Frenchman Alain Cayzac. Mr. Schmetterer had a long association with Euro RSCG's parent company, Havas, having worked as CEO of its Havas Dentsu Marsteller unit in the late 1980s. He also served as a partner in the successful New York agency Messner Vetere Berger Carey Schmetterer during the 1990s. Alain de Pouzilhac, who became CEO of Havas Advertising in 1996, supported Mr. Schmetterer as the best person to blend the U.S. agencies into a single Euro RSCG brand. With Mr. Schmetterer's appointment, the agency moved its corporate headquarters to New York from Paris.

In early 1998 the French utility and communications giant Compagnie Générale des Eaux purchased Havas for nearly $4 billion and formed a new company, Vivendi Universal, which became the parent company to Havas. By 2001, Vivendi had gradually reduced its ownership of Havas, and in June of that year, Vivendi sold its remaining stake in Havas.

Havas, struggling since 2001 with debt and hurt by the global economic downturn, in 2003 set an aggressive restructuring plan that included paring costs and selling or closing under-performing units. The reorganization left Euro RSCG Worldwide as the holding company’s one global agency network. Mr. Schemetterer left his post as chairman and CEO in January 2004 and was replaced by James Heekin, who joined Euro in September 2003 as president and chief operating officer. He was previously head of Interpublic Group of Cos.’ McCann Erickson WorldGroup.

In 2003, Euro RSCG had worldwide revenue of $756.1 million, up 3.1% from 2002, and U.S. revenue of $194.1, up 1.4% from the previous year's figure.